Content copyright 2017. MORLEY-CONSULTING.CO.UK. All rights reserved.
Practical, pragmatic advice and training
Tel: +44 (0)7841133027
Customs Tariff Classification
All goods that move across borders have to be classified for customs purposes. There is only one classification that is correct for each item although which classification is correct can often be a matter of considerable legal debate.
Amongst other things the tariff classification indicates
- the percentage of import duty payable
- what reductions in import duty might be applicable
- which licences might be required
- which special documents or procedures might apply
Incorrect classification can lead to over payment of import duty and taxes and un-necessary bureaucracy. It can also lead to under payment of import duty and taxes which can lead to customs penalties including fines.
Binding Tariff Information (BTI)
This is a document issued by your local customs authority which confirms the tariff classification that they consider to be correct. This is intended to give certainty to traders for specified periods of time.
A term used to describe either the suspension of the requirement to pay import duty or the deferment of the need to pay import duty or a reduction in the amount of import duty that is payable.
Inward Processing relief
A customs procedure for goods which are to be imported into the EU to undergo processing of some kind including repair work. The processed product must be re-exported from the EU. Providing the rules of the scheme are met import duty and tax will not be payable on the imported goods.
Processing Under Customs Control
A customs procedure for components or assemblies which are going to be imported into the EU to undergo processing of some kind. The processed product must be for use within the EU. This scheme is applicable when the import duty percentage applicable to the processed goods is lower than the import duty percentage applicable to the imported components or assemblies.
Outward Processing relief
A customs procedure for goods which are to be exported from the EU to undergo processing of some kind including repair work. The processed product must be returned to the EU after processing. At this point, providing the rules of the scheme have been met, import duty and tax will be not be payable on the import of the processed goods.
The place the goods originated is important as it can be the basis for special treatment such as duty discounts. Various forms are used to evidence origin but deciding origin is not simply a matter of where the products were made. There are special formulae assigned to each tariff code.
Origin can also be the basis for the imposition of additional duties or licencing and can be the basis for preventing items from being exported or imported. Sanctions etc. must be taken into account.
Binding Origin Information (BOI)
This is a document issued by your local customs authority which confirms the origin that they consider to be correct. This is intended to give certainty to traders for specified periods of time.
Anti dumping duty (ADD)
Is an additional amount of import duty imposed to prevent suppliers from outside the EU flooding the EU with cheap products, perhaps at below cost price, thus threatening to damage EU manufacturers. Anti-dumping duty can be imposed very quickly causing problems for importers who had not allowed for such high levels of import duty.
Countervailing duty (CD)
Is an additional customs duty imposed on goods which have received government subsidies in the originating or exporting country. For customs purposes, it is treated in the same way as anti-dumping duty. It is possible to have both anti-dumping duty and countervailing duty on the same product.
This is the method of arriving at the value for customs purposes. There are actually six separate methods to be used in differing circumstances. This value is used as the basis for the calculation of import duty and tax. For those who wish to ensure that they pay the right amount of import duty rather than too much or too little the invoice price is only the beginning of the calculation.
Customs can seek to recover underpaid or non-paid import duty for up to three years from the date of import. Traders can also seek repayment of overpaid import duty in certain circumstances.
This is also called bonded warehousing. The need to pay import duty and tax is suspended on imported goods placed into customs warehousing . The import duty and tax must be paid when the goods leave the warehouse, unless of course they are re-exported outside the EU in which case the import duty and tax need not be paid.
Many types of temporary imports can have their import duty and tax suspended so long as they are re-exported within specified time limits. Some items which will be tested to destruction can also benefit from this relief.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora. This Convention lists those species and products in which trade is forbidden e.g. ivory and rhino horn and those that may be traded commercially but under specific conditions e.g. alligator skin, mahogany, mother of pearl . It applies to live or dead specimens and products made from them. Special rules apply to antique items and personal effects. The Convention uses a variety of export and import permits to control trade.
Military and dual use goods (those that can have military and civilian uses) may need export licences.
The requirement for a licence is dependent on the product, destination, importer and end-use.
Governments seek to protect their citizens from what they perceive as dangerous or harmful products and therefore impose rules regarding product approvals or licences e.g. cosmetics, food, electricals. Products without the appropriate approvals may be detained or destroyed at import.
A report required under EU VAT regulations which must be sent to Customs on a monthly basis by VAT registered traders whose shipments reach given threshold, giving details about all despatches to and arrivals from the EU.
Export Sales List
A report required under EU VAT regulations which must be sent to Customs on a monthly basis by VAT registered traders ,whose shipments reach given threshold giving details about all sales to EU customers.